SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Environmental Tectonics Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),14a-6(i)(1), or
14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies: n/a
2) Aggregate number of securities to which transaction
applies: n/a
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11./1/
4) Proposed maximum aggregate value of transaction: n/a
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or
Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing party:
4) Date filed:
________________________
/1/ Set forth the amount on which the filing fee is calculated
and state how it was determined.
<PAGE>
ENVIRONMENTAL TECTONICS CORPORATION
_________________________________________
Notice of Annual Meeting of Shareholders
August 9, 1996
_______________________________________
The Annual Meeting of the Shareholders of Environmental Tectonics
Corporation will be held at the offices of the Company, County
Line Industrial Park, Southampton, Pennsylvania on Friday,
August 9, 1996, at 10:00 a.m. (eastern time) for the following
purposes:
1. To elect five directors to serve until their successors have
been elected and qualified.
2. To consider and act upon a proposal to amend the Company's
Articles of Incorporation to authorize 1,000,000 shares of
preferred stock.
3. To transact such other business as may properly come before
the meeting.
The record date for determination of shareholders entitled to
notice of and to vote at the meeting is July 3, 1996.
By Order of the Board of Directors
ANN M. ALLEN, Secretary
July 8, 1996
Whether or not you expect to attend the meeting, please sign and
date the enclosed proxy and return it promptly in order that your
stock may be voted. If you attend the meeting, you may withdraw
your proxy and vote in person.
<PAGE>
ENVIRONMENTAL TECTONICS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
August 9, 1996
PROXY STATEMENT
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of Environmental Tectonics
Corporation, a Pennsylvania corporation (the "Corporation" or the
"Company"), of proxies in the accompanying form for use at the
Annual Meeting of Shareholders to be held at 10:00 a.m. (eastern
time) on Friday, August 9, 1996, at the Company's executive
offices at County Line Industrial Park, Southampton, PA 18966 and
at any adjourned meeting thereof (the "Annual Meeting"). This
Proxy Statement and accompanying form of proxy are being first
sent or given to security holders on or about July 8, 1996. In
addition to the use of the mails, directors, officers and
employees of the Corporation may solicit proxies personally or by
telephone. The expense of soliciting proxies will be borne by
the Company.
ACTION TO BE TAKEN UNDER THE PROXIES
When a proxy in the enclosed form is properly executed and
returned in the envelope provided, the shares represented thereby
will be voted at the Annual Meeting in accordance with the
instructions specified therein. Absent clear instructions to the
contrary, such shares will be voted "FOR" the election, as
directors, of the Board of Directors' nominees ("Matter No. 1")
and "FOR" the amendment to the Corporation's Articles of
Incorporation to authorize 1,000,000 shares of preferred stock
("Matter No. 2"). Any such proxy may be revoked at any time
before its exercise by (i) executing and delivering a later dated
proxy to the Secretary of the Corporation, (ii) giving written
notice of revocation to the Secretary of the Corporation, or
(iii) by voting in person at the Annual Meeting. The mailing
address of the Corporation is County Line Industrial Park,
Southampton, PA 18966.
VOTING SECURITIES AND RECORD DATE
The close of business on July 3, 1996, has been fixed as the
record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting. On the record date,
the Corporation had outstanding 2,928,944 shares of Common Stock,
$.10 par value per share ("Common Stock"). Each share of Common
Stock is entitled to one vote on all matters coming before the
Annual Meeting. Holders of Common Stock are not entitled to
cumulate votes in elections of directors. The presence, in
person or by proxy, of shareholders entitled to cast a majority
of the votes which all shareholders are entitled to cast shall
constitute a quorum at the Annual Meeting. Abstentions with
respect to one or more proposals voted upon at the Annual Meeting
will be included for purposes of determining a quorum for the
Annual Meeting.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July 1, 1996, the
number of shares and percentage of the Company's Common Stock
owned beneficially by each director, each nominee for director,
each named executive officer set forth in the Summary
Compensation Table on page 8 and each person holding, to the
Company's knowledge, more than 5% of the outstanding Common
Stock. The table also sets forth the holdings of all directors
and executive officers as a group.
Amount and
Nature of Percent
Beneficial of Common
Name and Address of Beneficial Owner Ownership Stock
William F. Mitchell (1) 943,949 32.2%
c/o Environmental Tectonics
Corporation
County Line Industrial Park
Southampton, PA 18966
Pete L. Stephens, M.D. (2) 315,650(3) 10.8%
1150 Eleni Lane
West Chester, PA 19382
Richard E. McAdams (4) 25,526(5) *
c/o Environmental Tectonics
Corporation
County Line Industrial Park
Southampton, PA 18966
Michael A. Mulshine (6) 0(7) *
Osprey Partners
2517 Route 35
Manasquan, NJ 08736
Philip L. Wagner, Ph.D. (8) 6,000(9) *
Chadds Ford Technologies, Inc.
P.O. Box 377
Chadds Ford, PA 19317
All directors and executive
officers as a group (11 persons) 1,332,726(10) 44.9%
* less than 1%
____________________
(1) Chairman of the Board, President and Director of the
Corporation. Shares include 2,065 held jointly with spouse.
(2) Director of the Corporation.
(3) Includes 8,550 shares held by or for the benefit of
Dr. Stephens' wife and two of his children.
(4) Director of the Corporation.
(5) Includes options to purchase 6,000 shares held under the
Company's Incentive Stock Option Plan that are presently
exercisable.
(6) Director of the Corporation.
(7) Does not include warrants to purchase 125,000 shares of
stock that are exercisable only upon completion of certain
activities under a separate consulting agreement.
(8) Director of the Corporation.
(9) Includes 4,000 shares held by or for the benefit of
Dr. Wagner's wife.
(10) Includes options to purchase 36,800 shares held under the
Company's Incentive Stock Option plan that are presently
exercisable.
<PAGE>
MATTER NO. 1
ELECTION OF DIRECTORS
The Bylaws of the Corporation provide that the Board of
Directors of the Corporation shall consist of not less than three
nor more than ten directors. Within the foregoing limits, the
Board of Directors may from time to time fix the number of
directors. The Board of Directors of the Corporation presently
consists of five directors.
At the 1996 Annual Meeting of Shareholders, five directors
shall be elected to serve for a one-year term and until their
successors are elected and qualified.
Unless otherwise instructed, the Board of Directors'
proxyholders will vote the proxies received by them for the
election of the five nominees named below. If any nominee should
become unable to serve for any reason, proxies will be voted in
favor of a substitute nominee as the Board of Directors of the
Corporation shall determine. The Board of Directors has no
reason to believe that any of the nominees named will be unable
to serve, if elected.
There is no cumulative voting for the election of directors.
Each share of Common Stock is entitled to cast one vote for each
nominee. The five nominees who receive the highest number of
votes cast at the Annual Meeting will be elected as directors.
Abstentions and broker non-votes will not constitute or be
counted as votes cast for purposes of the Annual Meeting.
The following table sets forth certain information with
respect to the Board of Directors' nominees for director, each of
whom presently serves as a director of the Corporation.
Principal
Occupations
Served as and Position
Director and Offices
Name Age Since with the Company
William F. Mitchell(1) 54 1969 Chairman of the
Board, President and
Director
Richard E. McAdams(2) 60 1985 Executive Vice
President and
Director
Philip L. Wagner, Ph. D.(3) 60 1993 Director
Pete L. Stephens, M.D.(4) 58 1974 Director
Michael A. Mulshine(5) 57 1994 Director
____________________
(1) Mr. Mitchell has been Chairman of the Board, President and
Chief Executive Officer of the Company since 1969, except
for the period from January 24, 1986 through January 24,
1987, when he was engaged principally in soliciting sales
for the Company's products in the overseas markets.
(2) Mr. McAdams has been with the Company since 1970. He became
a Vice President in 1978, and an Executive Vice President in
1990, with responsibility for contract administration.
(3) Dr. Wagner is an organic chemist with over 30 years of
diversified experience managing research and development and
new business development at E.I. du Pont de Nemours &
Company. In November 1992, he founded Chadds Ford
Technologies, Inc., a consulting firm. He is currently
President of Chadds Ford Technologies, Inc.
(4) Dr. Stephens has been a physician engaged in the private
practice of medicine for over 30 years.
(5) Mr. Mulshine has served as a Director of VASCO Corporation,
a public company in the computer data security business,
since 1991. He has been President of Osprey Partners, a
management consulting firm, since 1977. He is Chairman of
the Board of Dynex Sport Optics, Inc., an exclusive licensee
of Wilson Sporting Goods Company and has been a Director and
Secretary of Scangraphics, Inc., a public company, since
1985. Mr. Mulshine is an instrument-rated pilot who served
as General Manager of a flight simulator company and was
involved in simulation and modeling in his early career. He
received a Bachelor of Science degree in Electrical
Engineering in 1961 from Newark College of Engineering.
During the year ended February 23, 1996, the Company had an
Audit Committee consisting of three independent outside
directors; Messrs. Michael A. Mulshine, Pete L. Stephens, and
Philip L. Wagner. These three independent outside directors also
served on the Company's Compensation Committee during the year
ended February 23, 1996. The Audit Committee is charged with
reviewing and overseeing the Company's financial systems and
internal control procedures and conferring with the Company's
independent accountants with respect thereto. The Compensation
Committee is charged with reviewing the compensation of officers
and key personnel. The Company does not have a standing
nominating committee.
During the year ended February 23, 1996 the Board of
Directors held two meetings and the Audit and Compensation
Committees each held one meeting. All members of the Board
attended all of the meetings of the Board held while they were
members of the Board. All members of the Audit and Compensation
Committees attended all meetings of the Committees held while
they were members thereof.
There are no executive officers of the Company who are not
also directors of the Company.
<PAGE>
REMUNERATION OF DIRECTORS AND OFFICERS
The following table sets forth compensation paid by the
Company to the Chief Executive Officer for services rendered
during fiscal years 1996, 1995 and 1994. There are no other
executive officers whose total annual salary and bonus exceeds
$100,000. The footnotes to the table provide additional
information concerning the Company's compensation and benefit
programs.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
Other
Name and Annual All Other
Principal Fiscal Compensation Compensation
Position Year Salary($) Bonus($) ($)(1) ($)(2)
<S> <C> <C> <C> <C> <C>
William F. 1996 $119,531 $0 $0 $ 2,473
Mitchell, 1995 131,568 0 0 1,154
President and 1994 165,105 0 0 1,453
Chief Executive
Officer
___________________
</TABLE>
(1) The Company's executive officers receive certain
perquisites. For fiscal years 1996, 1995 and 1994, these
perquisites received by Mr. Mitchell did not exceed the
lesser of $50,000 or 10% of his salary and bonus.
(2) These amounts represent the Company's contribution to the
Retirement Savings Plan.
Directors of the Company who are not officers of the Company
are paid $600 for Board of Directors meetings which they attend.
Additional compensation is not paid for committee meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 20, 1994, the Company and Mr. Mulshine entered
into a Consulting Agreement, pursuant to which the Company has
issued warrants to Mr. Mulshine to purchase 125,000 shares of the
Company's common stock at an initial exercise price of $4.75 in
consideration for Mr. Mulshine providing certain consulting
services to the Company.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's
equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and
the American Stock Exchange. Officers, directors and greater
than ten percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) Forms they
file. The rules of the SEC regarding the filing of such
statements require that "late filings" of such statements be
disclosed in the Company's proxy statement.
Based solely on its review of the copies of such forms
received by it, or written representations from certain reporting
persons that no Forms 5 were required for those persons, the
Company believes that, during the fiscal year ended February 23,
1996, all filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were
complied with.
THE CORPORATION'S AUDITORS
Under the Corporation's Bylaws and the governing law,
authority to select the Corporation's independent accountants
rests with the Board of Directors. Such selection is made
through formal act of the Board of Directors. It has not been
and is not the Corporation's policy to submit selection of its
auditors to the vote of the shareholders because there is no
legal requirement to do so. Grant Thornton LLP was the Company's
auditors for the fiscal years ended February 24, 1995 and
February 23, 1996. Auditors have not been selected for the
current fiscal year. A representative of Grant Thornton is
expected to be present at the Annual Meeting and will be given an
opportunity to make a statement to the shareholders, if he
desires to do so. Such representative will also be available to
answer appropriate questions from shareholders.
Coopers & Lybrand LLP was dismissed by the Company on
January 3, 1995. In each of the two fiscal years for the two
year period ended February 25, 1994, the accountant's reports on
the Company's financial statements contained unqualified
opinions, which were modified in fiscal 1994 for (i) an
uncertainty paragraph for unsettled litigation, and (ii) an
emphasis of a matter paragraph for contract claims receivable and
a renegotiated extension to the Company's credit facility; and in
fiscal 1993 for an uncertainty paragraph for unsettled
litigation. The decision to dismiss the accountant was approved
by the Company's audit committee.
In each of the two fiscal years for the two year period
ended February 25, 1994 there were disagreements which, if not
resolved to the satisfaction of the former accountant, would have
caused it to make reference to the subject matter of the
disagreement in connection with its report. In fiscal 1995,
there were no disagreements with the former accountant in the
interim period subsequent to February 25, 1994. In fiscal 1994,
there were disagreements as to (i) the amount of revenue to be
recognized under the percentage of completion method for a
certain contract, (ii) income recognition of a certain insurance
settlement, and (iii) the capitalization of certain software
development costs. These issues were discussed with the
Company's audit committee after final resolution was made to the
satisfaction of the former accountant. There were no issues
which involved differences of opinion over material matters
related to auditing scope or procedures. The Company authorized
the former accountant to respond fully to the inquiries of the
successor accountant concerning the subject matter of each of
these disagreements. In fiscal 1993, there were no issues which
involved differences of opinion over material matters related to
accounting principles or practices, financial statement
disclosures or presentation and auditing scope procedures.
The Company engaged Grant Thornton LLP as its new
independent accountants as of February 16, 1995. During the two
fiscal years prior to February 24, 1995, and through February 24,
1995, the Company did not consult with Grant Thornton on items
which (i) were or should have been subject to SAS 50 or
(ii) concerned the subject matter of a disagreement or reportable
event with the former auditors, Coopers & Lybrand LLP.
MATTER NO. 2
AMENDMENT TO ARTICLES OF
INCORPORATION TO AUTHORIZE 1,000,000 SHARES
OF PREFERRED STOCK
The Board of Directors of the Corporation has approved an
amendment to Paragraph 6 of the Articles of Incorporation of the
Corporation (the "Amendment") which, if adopted, would authorize
1,000,000 shares of preferred stock (the "Preferred Stock"). The
Corporation's Articles of Incorporation presently authorize
10,000,000 shares of common stock (the "Common Stock") and no
shares of preferred stock. As of July 1, 1996, there were
2,928,944 shares of Common Stock issued and outstanding.
If adopted, the Amendment will authorize the Board of
Directors to issue, from time to time, up to 1,000,000 shares of
Preferred Stock as a class without a series, or in one or more
series. There is currently no class of Preferred Stock issued
and outstanding.
Reasons For Proposed Amendment.
Matter No. 2 is being proposed by the Board of Directors
because the Board believes that it is advisable to have the
Preferred Stock authorized for various corporate purposes. The
Corporation may from time to time consider acquisitions, stock
dividends, and public or private financings which may involve the
issuance of shares of the Preferred Stock. In addition, the
Board of Directors is presently contemplating raising between
$3 million and $10 million of additional capital through the sale
(the "Proposed Sale") of (i) shares of Preferred Stock for cash
in a private placement transaction and/or (ii) shares of Common
Stock for cash in an underwritten public offering or a private
placement transaction. The Board of Directors of the Corporation
has no plans or proposals to sell the Preferred Stock or Common
Stock in the Proposed Sale for anything other than cash. If the
Corporation elects to offer and sell shares of Preferred Stock,
the terms of such Preferred Stock will be negotiated with
prospective investors. Accordingly, it is impossible to predict
the terms of any series of Preferred Stock that might be sold in
the Proposed Sale. No assurances can be given as to how many
shares of Preferred Stock or Common Stock, if any, would be sold
in the Proposed Sale or the amount of capital that would be
raised. The Corporation intends to use any proceeds from the
Proposed Sale for working capital purposes.
The Board of Directors of the Corporation will not solicit
shareholder approval in connection with the issuance of the
Preferred Stock in the Proposed Sale or otherwise, except to the
extent such approval is required by law or under the rules of the
American Stock Exchange. The terms of the Preferred Stock to be
offered in connection with the Proposed Sale or otherwise,
including dividend rates, conversion features, voting rights,
preemptive rights, redemption rights, liquidation rights, and
similar matters will be determined by the Board of Directors at
the time of such offering.
The Preferred Stock will have a preference over the Common
Stock as to the payment of dividends, as to the right to
distribution of assets upon redemption of shares or upon
liquidation of the Corporation, or as to both dividends and
assets, and such other preferences as may be fixed by the Board
of Directors.
Advantages and Disadvantages.
The advantage of the proposed Amendment is that it provides
the Board of Directors with the flexibility to issue the
Preferred Stock with such terms as may be necessary to sell the
Preferred Stock to investors on a timely basis. If the
Corporation was required to obtain shareholder approval of the
specific terms, rights and preferences of a series of Preferred
Stock prior to issuing such series of Preferred Stock, obtaining
such approval could take several months. Changes in market
conditions during such period could result in the terms that are
approved by the shareholders no longer being acceptable to
investors.
The disadvantage of the proposed amendment is that
management of the Corporation cannot predict with any certainty
what effect, if any, the issuance of any shares of Preferred
Stock will have on the voting or other rights of the holders of
the Corporation's Common Stock. In addition, the Board of
Directors could use the Preferred Stock to deter or defeat a
hostile attempt to acquire control of the Corporation. See
"Antitakeover Effect" below.
Antitakeover Effect.
The adoption of the Amendment would empower the Board of
Directors, without shareholder approval, to issue a block of
Preferred Stock to persons friendly to or affiliated with the
Corporation's management and having terms, including voting
power, which may have the effect of deterring or discouraging,
among other things, a non-negotiated tender or exchange offer for
the Corporation's stock, a proxy contest for control of the
Corporation, the assumption of control of the Corporation by a
holder of a large block of the Corporation's stock, and the
removal of the Corporation's management.
The proposed Amendment is not the result of any effort to
obtain control of the Corporation or to accumulate the
Corporation's stock that is known to management of the
Corporation, and the Corporation's management has no present
intent to propose other antitakeover measures in the foreseeable
future.
Other Antitakeover Provisions.
In addition to the proposal to authorize the issuance of
Preferred Stock, the Corporation's articles and bylaws and the
Pennsylvania Business Corporation Law contain provisions that may
have antitakeover effects. The following brief description of
certain of such provisions is qualified in its entirety by
reference to the Corporation's Articles of Incorporation and
Bylaws and the Pennsylvania Business Corporation Law.
Articles and Bylaws. The Corporation's Articles of
Incorporation and Bylaws do not contain any other provisions that
may have the effect of discouraging or deterring an offer for the
Corporation's stock or an attempt to take control of the
Corporation except that shareholders are not entitled to cumulate
their votes for the election of directors. The absence of
cumulative voting may result in a holder of a large block of the
Corporation's stock being unable to elect any representative to
the Board of Directors.
Pennsylvania Law. The Pennsylvania Business Corporation Law
contains certain provisions applicable to the Corporation which
may have the effect of deterring or discouraging, among other
things, a non-negotiated tender or exchange offer for the
Corporation's stock, a proxy contest for control of the
Corporation, the assumption of control of the Corporation by a
holder of a large block of the Corporation's stock and the
removal of the Corporation's management. These provisions, among
other things: (1) require that, following any acquisition by any
person or group of 20% of a public corporation's voting power,
the remaining stockholders have the right to receive payment for
their shares, in cash, from such person or group in an amount
equal to the "fair value" of the shares, including an increment
representing a proportion of any value payable for control of the
corporation; and (2) prohibit for five years, subject to certain
exceptions, a "business combination" (which includes a merger or
consolidation of the corporation or a sale, lease or exchange of
assets) with a stockholder or group of stockholders beneficially
owning 20% more of a public corporation's voting power.
In April 1990, Pennsylvania adopted legislation further
amending the Pennsylvania Business Corporation Law. To the
extent applicable to the Corporation at the present time, this
legislation generally (1) expands the factors and groups
(including shareholders) which the Board of Directors can
consider in determining whether a certain action is in the best
interests of the corporation, (2) provides that the Board need
not consider the interests of any particular group as dominant or
controlling, (3) provides that directors, in order to satisfy the
presumption that they have acted in the best interests of the
corporation, need not satisfy any greater obligation or higher
burden of proof with respect to actions relating to an
acquisition or potential acquisition of control, (4) provides
that actions relating to acquisitions of control that are
approved by a majority of "disinterested directors" are presumed
to satisfy the directors' standard unless it is proved by clear
and convincing evidence that the directors did not assent to such
action in good faith after reasonable investigation, and
(5) provides that the fiduciary duty of directors is solely to
the corporation and may be enforced by the corporation or by a
shareholder in a derivative action, but not by a shareholder
directly. One of the effects of the new fiduciary duty
provisions may be to make it more difficult for a shareholder to
successfully challenge the actions of the Board of Directors in a
potential change in control context.
Other provisions of the 1990 amendments prevent a person who
has acquired 20% or more of the voting power of the Company from
voting such shares unless the "disinterested" shareholders
approve such voting rights. Failure to obtain such approval
exposes the owner to the risk of a forced sale of the shares to
the Company. If shareholder approval is obtained, the Company is
subject to minimum severance payments to certain employees
terminated within two years of the approval and to a prohibition
on the abrogation of certain labor contracts prior to their
stated date of expiration. In addition, in the event that the
person or group publicly discloses that they may acquire control
of the Company or if they acquire (or publicly disclose an offer
or intent to acquire) 20% or more of the voting power of the
Company and, in either case, sell shares within 18 months
thereafter, then any profits from the sale of equity securities
of the Company by such person or group during the 18-month period
belong to the Company if the securities that were sold were
acquired during the 18-month period or within 24 months prior
thereto.
AMEX Requirements.
The Corporation's Common Stock is listed for quotation on
the American Stock Exchange ("AMEX"), which requires shareholder
approval of the issuance of additional shares of Common Stock or
securities convertible into Common Stock. If the issuance of
such securities (i) is in connection with the acquisition of a
company and the shares of Common Stock or securities convertible
into Common Stock could result in an increase in the number of
outstanding shares of Common Stock of 20% or more, (ii) is in
connection with the acquisition of a company where a director,
officer or substantial shareholder of the Corporation has a 5% or
greater interest in such company and the issuance of the
securities could result in an increase in outstanding Common
Stock of 5% or more, or (iii) is in connection with a transaction
other than a public offering at a price less than the greater of
book or market value and will equal 20% or more of the Common
Stock outstanding before issuance.
Language of Proposed Amendment.
The amendment of the Articles of Incorporation to authorize
the issuance of 1,000,000 shares of the Preferred Stock will
consist of a revision to Paragraph 6 of the Articles of
Incorporation to provide as follows:
THE AGGREGATE NUMBER OF SHARES WHICH THE
CORPORATION SHALL HAVE AUTHORITY TO ISSUE IS 10,000,000
SHARES OF COMMON STOCK, HAVING A PAR VALUE OF $.10 PER
SHARE (THE "COMMON STOCK"), AND 1,000,000 SHARES OF
PREFERRED STOCK (THE "PREFERRED STOCK").
THE PREFERRED STOCK MAY BE ISSUED FROM TIME TO
TIME AS A CLASS WITHOUT SERIES OR, IF SO DETERMINED BY
THE BOARD OF DIRECTORS OF THE CORPORATION, EITHER IN
WHOLE OR IN PART, IN ONE OR MORE SERIES. THERE IS
HEREBY EXPRESSLY GRANTED TO AND VESTED IN THE BOARD OF
DIRECTORS OF THE CORPORATION AUTHORITY TO FIX AND
DETERMINE (EXCEPT AS FIXED AND DETERMINED HEREIN), BY
RESOLUTION, THE PAR VALUE, VOTING POWERS, FULL OR
LIMITED, OR NO VOTING POWERS, AND SUCH DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS, IF ANY, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, IF ANY, INCLUDING
SPECIFICALLY, BUT NOT LIMITED TO, THE DIVIDEND RIGHTS,
CONVERSION RIGHTS, REDEMPTION RIGHTS AND LIQUIDATION
PREFERENCE, IF ANY, OF ANY WHOLLY UNISSUED SERIES OF
PREFERRED STOCK (OR THE ENTIRE CLASS OF PREFERRED STOCK
IF NONE OF SUCH SHARES HAVE BEEN ISSUED), THE NUMBER OF
SHARES CONSTITUTING ANY SUCH SERIES AND THE TERMS AND
CONDITIONS OF THE ISSUE THEREOF. PRIOR TO THE ISSUANCE
OF ANY SHARES OF PREFERRED STOCK, A STATEMENT SETTING
FORTH A COPY OF EACH SUCH RESOLUTION OR RESOLUTIONS AND
THE NUMBER OF SHARES OF PREFERRED STOCK OF EACH SUCH
CLASS OR SERIES SHALL BE EXECUTED AND FILED IN
ACCORDANCE WITH THE PENNSYLVANIA BUSINESS CORPORATION
LAW OF 1988, AS AMENDED. UNLESS OTHERWISE PROVIDED IN
ANY SUCH RESOLUTION OR RESOLUTIONS, THE NUMBER OF
SHARES OF CAPITAL STOCK OF ANY SUCH CLASS OR SERIES SO
SET FORTH IN SUCH RESOLUTION OR RESOLUTIONS MAY
THEREAFTER BE INCREASED OR DECREASED (BUT NOT BELOW THE
NUMBER OF SHARES THEN OUTSTANDING), BY A STATEMENT
LIKEWISE EXECUTED AND FILED SETTING FORTH A STATEMENT
THAT A SPECIFIED INCREASE OR DECREASE THEREIN HAD BEEN
AUTHORIZED AND DIRECTED BY A RESOLUTION OR RESOLUTIONS
LIKEWISE ADOPTED BY THE BOARD OF DIRECTORS OF THE
CORPORATION. IN CASE THE NUMBER OF SUCH SHARES SHALL
BE DECREASED, THE NUMBER OF SHARES SO SPECIFIED IN THE
STATEMENT SHALL RESUME THE STATUS THEY HAD PRIOR TO THE
ADOPTION OF THE FIRST RESOLUTION OR RESOLUTIONS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT.
The affirmative vote of a majority of all votes cast at the
Annual Meeting is required to approve the Amendment. Abstentions
and broker non-votes will not constitute or be counted as votes
cast for purposes of the Annual Meeting. All proxies will be
voted "FOR" approval of the Amendment unless a shareholder
specifies to the contrary on such shareholder's proxy card.
SOLICITATION OF PROXIES
The Company has provided proxy materials to brokers,
custodians, nominees, and fiduciaries and requested that such
materials be forwarded to the beneficial owners of stock
registered in the names of such brokers, custodians, nominees,
and fiduciaries. In addition, solicitation of proxies may be
made by officers, directors, and regular employees of the Company
by personal interview, mail, telephone, and telegraph. The cost
of soliciting proxies and related services will be borne by the
Company.
SHAREHOLDER PROPOSALS
Proposals which shareholders desire to have included in the
Proxy Statement for the 1997 Annual Meeting of Shareholders must
be received at the Corporation's executive offices, County Line
Industrial Park, Southampton, Pennsylvania 18966 on or before
March 10, 1997.
OTHER MATTERS
The Company knows of no business which will be presented for
consideration at the meeting. However, if other matters come
before the meeting, it is the intention of the proxyholders to
vote upon such matters as they, in their discretion, may
determine.
The Company's Annual Report to the Shareholders for the year
ended February 23, 1996, is enclosed. Each person solicited
hereunder can obtain a copy of the Corporation's Annual Report on
Form 10-K for the year ended February 23, 1996, as filed with the
Securities and Exchange Commission, without charge, except for
exhibits to the report, by sending a written request to
Environmental Tectonics Corporation, County Line Industrial Park,
Southampton, PA 18966, Attention: Ann M. Allen, Secretary.
By Order of the Board of Directors
ANN M. ALLEN, Secretary
July 8, 1996
<PAGE>
ENVIRONMENTAL TECTONICS CORPORATION
ANNUAL MEETING TO BE HELD ON AUGUST 9, 1996
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints
Pete L. Stephens and Philip L. Wagner, or either of them, with
full power of substitution, as the undersigned's proxies to vote
at the Annual Meeting of Shareholders called for August 9, 1996
and at any adjournments thereof:
1. Election of Directors:
[ ] For all nominees listed below (except as marked to
the contrary) or
[ ] Withhold the vote for all nominees.
Instruction: To withhold authority to vote for any individual
nominee, strike out his name below:
Richard E. McAdams, William F. Mitchell, Michael A.
Mulshine, Pete L. Stephens, Philip L. Wagner
2. Amendment of Articles of Incorporation to Authorize
1,000,000 Shares of Preferred Stock
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting.
This Proxy, when property executed, will be voted in the
manner designated herein by the undersigned shareholder. In the
absence of designation, this Proxy will be voted "FOR" the
election of all of the Board of Directors' nominees as directors
and "FOR" the amendment of the Corporation's Articles of
Incorporation to authorize 1,000,000 shares of Preferred Stock.
IN WITNESS WHEREOF, the undersigned has set his hand and
seal.
Dated:________________, 1996 ____________________________(SEAL)
Shareholder's signature
____________________________(SEAL)
Shareholder's signature
Please sign exactly as name appears
herein. When signing as attorney,
executor, administrator, trustee,
guardian, etc., please give full
title as such.
[ ] I plan to attend the Annual
Meeting on August 9, 1996.
